This is an "ok" book that describes supposed trading methods of some "old master" traders in terms of an event-based trading model. This model requires buying upside breakouts from congestion areas on increasing volume during bull markets. This is a good method if one's disposition can withstand generally high-volatility trades. However, to claim that this mode of trading was actually used by Livermore, Baruch, or Loeb is perhaps claiming too much.
Livermore was highly secretive about his trading. Although he discussed his psychology of trading in LeFevre's work, he did not go into much detail about his actual trading method. He later claimed that industry changes wrought by the SEC in the early 1930s made the markets less amenable to his brand of analysis. He made and lost four fortunes and ended his career and life by suicide in 1940.
Baruch made a significant portion of his trading gains by means of London - New York arbitrage. There is further evidence that he traded, scalped, value invested, growth stock invested, etc. The trader, Baruch, described in this book is only a microcosm of this highly complex, and multi-faceted individual.
Loeb was in, out, and sometimes back in again on a single day on a particular stock! He was a feverish trader! He seldom held a stock for the intermediate-term, and almost never for the long-term. To trade in his manner, one has to be correct a minimum of 30% of the time, and be capitalized enough to bear heavy trading expenses.
Nicolas Darvas wrote two books, "How I Made $2,000,000 In The Stock Market," and "Wall Street: The Other Las Vegas." They are both must reads for the aspiring trader, and best exemplify the event-based model covered by this book under review. Darvas claimed that his trading account went into a nosedive when he continued to use this method during the advent of a bear market.
All of O'Neil's works are excellent. Since he is well-known and active today, I will not comment upon the section of the book devoted to him.
The method presented is useful if one: 1) is adequately capitalized; 2) exercises tight loss control; 3)has an effective selection filter; and 4) is psychologically equipped for active trading (not many people can successfully do this). The book itself, is written in a breezy, narative style, and makes for a quick, pleasurable read.